Online food market start-up gets boost from Naspers fund

Naspers Foundry last week closed its third deal, with technology start-up Food Supply Network , and now has its sights set on a technology education business. The fund, unveiled two years ago with a R1.4bn commitment by Naspers, is dedicated to supporting local tech start-ups.

It did not disclose the size of its investment in FSN, an independent, business-to-business foodproduct marketplace that integrates the ordering systems of manufacturers with those of distributors and buyers such as restaurants, hotels and retailers.

Naspers Foundry’s first deal, in June last year, was a R30m investment in online cleaning platform SweepSouth, which was followed in May by a R100m investment in Aerobotics — a platform that uses artificial intelligence and drones to help farmers manage their crops.

Fabian Whate, head of Naspers Foundry, says the fund is evaluating 20-30 investment opportunities.

The fund is looking at technology companies that align with Naspers’s portfolio of companies, from traditional and digital media to a range of online services and e-commerce.

“The financial sector is one of the largest underserved sectors and is right for disruption,” Whate says.

Naspers Foundry has a particular interest in payment systems, insurance technology and credit services, he says. Of these, insurance technology businesses are receiving serious consideration.

Whate says a few businesses that were under consideration are no longer viable due to market changes caused by Covid-19.

The most important criterion in assessing a potential investment is that the business is a South African start-up serving the local market, with potential to expand into other markets.

Other criteria include the calibre and experience of the team running the business, and whether they own a stake in it themselves — or “skin in the game”.

Also important is the life stage of the business — whether it has gained traction in the market, is generating revenue and shows potential to be scaled up.

Start-ups also need to be in sectors that Naspers is targeting, such as education and financial services.

The final consideration is what the investment will look like. Whate is clear that Naspers Foundry offers equity investment and does not provide financing for anything “that looks like or smells like debt”.